How many items can you explain on this list?
Give yourself a pat on the back if you could explain every item on the list and even more if you’re not financially trained.
While it is good if you understand the items on the list, the main question is how does it help you achieve your financial goals?
A common misconception people have about financial planning is that it is a good to have activity.
And as mentioned, this is one of the greatest financial mistake you could possibly make for yourself.
It is disheartening to say this but the image has been badly damaged due to aggressive sales individuals in the past.
But that is not a reason to leave your planning aside.
Think of this…
When you want to buy a brand new car, what are the steps that you take?
I’m sure as any sensible person; you’re not going to take your entire savings to pay for the car?
You would consider the amount of savings you can set aside for the car, calculate the loan principle and interest, and factor in the percentage of your savings to set aside.
Now in Singapore owning a car is considered a luxury item for many as the COE (Certificate of Entitlement) can be seen as something extremely costly…
Yet the demand is high as many aspire to own one for the convenience and prestige it brings.
The same should be said about your financial lifestyle shouldn’t it?
While the car is a privileged item for those fortunate to be earning more, there are 3 critical areas you need to include in your daily planning.
Debt is seen as something bad as we hear stories of people going bankrupt from debts. Yet debt when leveraged right, it can help you to maximise your repayment period.
This gives you more cash on hand to invest and you may get higher returns. The basis of a good investment plan.
It will happen one day. The question is, will it go according to your plan or will you be forced into an early retirement?
Don’t leave it to chance when you have say only 5 years left, to your intended retirement age, to make plans or when you’re suddenly given the dreaded golden handshake.
Many people have lost their hard earn dollars overnight to a single enemy that plagues us all…
While a healthy diet with exercise is important, a sound financial plan can help minimise the financial impact.
Creating, following and achieving any plan requires time, effort and discipline. Your financial plan is no different.
As planners, it is our role to help our clients create a plan that suits their needs.
What about you? How are you following your own financial plan?